DFFE on Transformation in the Forestry Sector & Challenges Facing the Department’s Forestry Branch; with Deputy Minister

Environment, Forestry and Fisheries

24 May 2022
Chairperson: Ms F Muthambi (ANC)
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Meeting Summary

Video

In a virtual meeting, the Department of Forestry, Fisheries and the Environment briefed the Committee on transformation in the forestry sector and the challenges facing the Department’s forestry branch.

The Department presented the status and ownership of plantations and the status of land claims and lease agreements. The Committee was briefed on land invasions in forest areas and moves to establish community forestry associations. The Department reported that challenges include aging and ailing workforce, timber theft and land invasions.

Members asked about plans to employ young people and train community members in forestry practices. They asked why forestry companies were not meeting economic empowerment targets. Other questions concerned the introduction of drought-resistant trees. The Department was also asked about a land invasion at Grabouw. Members asked about alternative land for the people and whether the occupation was coordinated. 

The Committee said it was high time to work together to find a lasting solution to the forestry issue during the Committee’s tenure, even if they had to schedule regular meetings.

Meeting report

The Chairperson opened the meeting and briefed the Members on a planned colloquium which had failed to take place because the Committee’s counterparts were busy with oversight and the KwaZulu-Natal (KZN) flood disaster. She was of the view that the Committee could move without them.

Mr N Singh (IFP) commented that the colloquium was an important matter and the Committee had to pin down their counterparts to a date. He also highlighted the matter of the UPL chemicals leak in Durban, saying it had to be discussed urgently.

Mr D Bryant (DA) concurred on the colloquium's urgency and importance. He said that the Chairperson had their support, and Members would assist if needed.

Ms C Phillips (DA) raised the issue of the St Lucia estuary, stating that farmlands were flooded and the farmers in the area were desperate. There was a need to dredge the river and clean the drains while the estuary mouth was still open. She also raised the issue of rhinos slaughtered in the Hluhluwe-iMfolozi Park.

Mr Bryant raised the issue of fishing processes and asked if it could fit into the agenda.

The Chairperson asked if the Committee could brainstorm all the issues while on a trip to the Free State.

DFFE briefing: transformation in the forestry sector

Chairperson’s remarks

The Chairperson welcomed the Deputy Minister and her team from the Department of Forestry, Fisheries and the Environment (DFFE). She said the team would give a briefing on the progress of transformation in the forestry sector and in resolving challenges, including the status and ownership of plantations and payment or non-payment of rentals.

The Chairperson said the Committee had looked at the White Paper on Sustainable Forest Development of 1996, which presented a clear policy on the restructuring or privatisation of industrial plantations. The Paper stated that government did not intend to remain in industrial forestry management. It provided objectives for the assets, such as ensuring that the resources were managed to benefit the local community while satisfying the national interest and that they would benefit current employees while maintaining efficiency.

The White Paper highlighted four key factors that consistently underscored the restructuring policy objective. They recognised that it was more appropriate for the private sector to perform essential commercial functions. The state’s historical role had distorted the prices of round wood pieces through long-term timber supply contracts, which contributed to inefficiencies. Another issue was the state ownership of industrial forests, which conflicted with its wider national and regulatory and policy obligations. The fourth element was the desire to reduce the financial burden on the state of running the forest operations, particularly those of the former homelands.

That was the policy, but nearly 26 years later, the Department was still managing plantations or industrial forests, with serious strain on the limited budget. For instance, about 70 percent of the forestry branch’s budget was allocated to salaries, so what could the remaining 30 percent be used beyond office space and equipment? It was no surprise to see the Department have high levels of temporary unplanted areas, land invasions by communities, timber theft, and regulatory and enforcement capacity challenges.

Ms Maggie Sotyu, Deputy Minister of Forestry, Fisheries and the Environment, introduced her team and said they would provide information on the issues raised by the Chairperson.

The Chairperson asked when the Department would fill the post of Deputy Director General (DDG) of the forestry branch since the Department had had an acting DDG for the past eight months.

The Deputy Minister replied that the Department of Public Service and Administration (DPSA) faced challenges. People felt that they had not been given the opportunity to apply because the Department did not receive some CVs. Since then, the Department conducted interviews and signed the document for the DPSA. The document would go to Cabinet, and the Department expected a response in a few weeks.

Forestry branch presentation

Ms Mmamokgadi Mashala, DDG: Corporate Management Services, led the Department’s presentation. Ms Pumeza Nodada, Acting DDG: Forestry Management, assisted with the presentation. The presentation began by outlining the background of plantations and ownership and the status of plantations and ownership. In 2001, Cabinet decided to restructure state-owned plantations. Three agreements were signed with companies. It was agreed each company would have BEE partners, workers' shares and assets for forestry communities. DFFE administers the forestry lease agreements on behalf of the state with an undertaking that government will not sell land claimed and that companies pay an annual market-related rental for land use. The presentation detailed the land claims in each package and progress towards settlement of claims and transfer of land to claimants. Members were taken through lease rentals. R188 435 518.69 were distributed to communities.

Category B & C plantations

The Department manages 110 733 04 ha of commercial forestry plantations.

Challenges include aging and ailing workforce, timber theft and land invasions – see presentation for interventions.

Land invasions

DFFE is responsible for direct management of about 24 000 ha in the Western Cape. The lease agreement of the private commercial company ended in 2019. DFFE plans to retain these areas under forestry production in line with the Commercial Forestry Masterplan, which promotes growth and investment in the sector. The Western Cape has a Boland package of about 7 000 ha, including the Grabouw plantation. The Grabouw plantation is currently invaded, with about 4 000 households occupying the land. The Kluitjieskraal plantation is also invaded, with about 24 households occupying the land. These are areas where forestry land is being changed for agricultural use. DFEE will investigate if there are other community members interested in Community Forestry Agreement (CFA) beyond those currently occupying the land.

The Committee was taken through the DFFE proposals and principles considered for a CFA. Critical success factors for a CFA include offers by communities, negotiations and management of community conflicts if they arise.

Management of plantations by DFFE

The Department recognised the imbalance between the budget utilised for payment of salaries vs management of plantations (production). See presentation for details on what is being done to address this.

Way forward

Within five years of the implantation of the Masterplan, the Department will work toward being a regulator. This will leverage resources for post-settlement support, compliance and enforcement.

The branch will be restructured.

Strengthening collaboration with Department of Agriculture, Land Reform and Rural Development to fast track resolution of claims so that communities access rental money. This forms part of Masterplan implementation.

(See slide presentation for details.)

Discussion

Mr N Paulsen (EFF) said the country had rapidly rising unemployment. The Department was speaking about ageing forestry workers. Some young people could be absorbed through the Expanded Public Works Programme (EPWP). Why did the Department not directly employ people to work in the forestry plantations? The proposal for community forestry was an important opportunity to create employment and change the economic imbalances that still existed 28 years into democracy. Was the Department considering introducing drought-resistant crops or trees in provinces? He commented that the management of the forests was a failed experiment; companies such as MTL had enriched themselves while the communities had not shared in the benefits. He asked about the numbers of the communities laying claims to the forests.

Ms Phillips asked about the life cycle of the trees planted in the forests. How mature were the forests? Was it possible for the Department to go all out to publicise illegal wood harvesting, especially in the Magaliesberg biosphere? Stopping people from buying the wood would stop the illegal harvesting of the wood.

Mr Bryant asked about 32 posts involving about 180 jobs done away within the forestry sector. How did the Department carry out all its plans without the requisite staff? Had the Department identified any alternative accommodation for the unlawful occupants in the Grabouw plantation? Was any litigation undertaken to establish whether the occupation was coordinated? Was there any criminal investigation underway? Were any fire risk evaluations conducted for the plantations? Were there alternatives to growing timber since it was very water-intensive, aside from the traditional ones?

Ms A Weber (DA) asked if people were going to be moved when the Department started the transfer of forests and plantations. Where would they be moved? Where would the Department get the money to fund such an activity? Would the people from the communities be trained to move into the management positions? She asked whether the Department would use drought-tolerant trees since water was scarce in South Africa. What was the Department going to do to retain the experience of the old employees?

The Chairperson wanted to know when the outstanding land claims were lodged, as it was important for the Committee to know to interact with the land claim commissioners on the settlement of the claims. She asked where the best cases of CFAs were so they could become role models. How long had those been in place? Had the Department started with mobilising funds to boost the management and the expansion of the category B and C plantations? What were the timelines for correcting companies that deviated from their agreements, which led to communities being deprived?

The Department had to act on behalf of the communities. The forestry sector was known to be white-owned despite some notable projects. In some instances, companies regressed on their BBBEE levels. For example, the Amathole Company had regressed from a level 3 contributor in 2017 to a level 7 contributor in 2022. How were the companies performing in the recruitment and retention of people with disabilities? What was the Department doing to help the industry to comply? 

Responses

Ms Nodada responded to the questions about ageing workers. The Department had only managed to employ young workers through EPWP, and it recognised the limitations that came with that. It was going to repurpose the posts to appoint younger people, and it had a target of 30 percent youth. 

The Department aimed to have CFAs across the country to do away with the past imbalances. The best practice was a forestry agreement that had been signed off in 2016 in KZN. It was a collaboration between three communities. One of the issues learned from the experience was that traditional leadership assisted in any conflicts arising in the communities. The challenge was that the three communities had different ways of doing things and the Department needed to find common ground on how they could come together and manage the plantation. Through the agreement, the communities got support from the private sector and could replant some of the areas. Some of the trees were being harvested and the communities were using the funds to refurbish the plantations further. The communities were also looking into additional activities, such as planting macadamia nuts, which had a harvest period of five to six years.

The Department had recently finalised two agreements in the Eastern Cape. It had gone to the private sector to ask for support for the communities, and it planned to train people to help them deal with the management aspects.

In response to difficulties companies had in finding black suppliers, the Department had done training in the Western Cape to enable communities to supply some of the services. There would be follow up training with support from the SETA. 

Regarding drought-resistant trees, research has been started. Tree breeding exercises were being done to plant trees with high drought and fire resistance in some areas. The Department would provide more information to the Committee in writing.

The Department would provide information in writing on the communities that had claims to the plantations, as she did not have the specifics at that moment.

Regarding the life cycle of trees, the sector was planting eucalyptus, which had a rotation of seven to eight years. Pine took between 20 and 25 years until harvest time. The maturity was very skewed because many places were temporarily unplanted, with smaller trees than mature ones.

The Department was taken aback by the illegal wood harvesting, and the mature trees had suffered. The Department would take up the plea about the Magaliesberg biosphere. Education campaigns tried to create as much awareness as possible in the communities about use of trees and their importance.

Most of the 32 posts that were done away with were lower-level ones aligned with the plantations. These posts were repurposed to create posts the Department wanted going forward since it would transfer the plantations to the communities and the companies. It had to ensure that the staff complement would align with the master plan. The Department had created posts to coordinate the Masterplan, post-settlement support and extension services.

The Department had started with an exercise to identify alternative land to deal with the Grabouw land invasion, but it did not have a firm property. The Department, the Department of Public Works and the municipality had to agree on the issue of service delivery after the move. The discussion was still underway. An investigation had started into whether the occupation was coordinated. She did not have the information and asked to revert to the Committee after hearing from the legal services in the Department.

The Department did fire risk evaluations on an ongoing basis. It was now affiliated with fire protection associations, and the Department was paying membership fees to get their support. The Department was also maintaining fire breaks and it had managed to buy new equipment to create the fire breaks and for firefighting.

One of the pillars of the post-settlement support strategy was providing technical advice and training to the communities to ensure they were well equipped to manage the plantations. As for the old workers, the Department would retain some to supervise and train younger staff.

The Department had looked at obtaining assistance from international funders and would continue to pursue this. It had received funds from the United Nations Forum on Forestry to provide the consultants who assisted with developing the national proposals. The Department had done the first phase, where it consulted and agreed on the type of projects. The projects included issues of forestation and conservation; these would still be submitted to see the type of support available.

Regarding noncompliance with BBBEE, the Department had had discussions in the previous month with other departments to see how they could fast track the issue of shareholding and make sure that shares were moved to the relevant communities. A team had been brought in to ensure the right communities were identified. Regarding the companies that had regressed on their BBBEE scores, the Department was working with the Charter Council to understand the issues. It would address the issue of scarce suppliers through training and the lease agreements when meeting the companies quarterly. The meetings tracked whether the companies could get new contractors and what kind of training should be done for the contractors to be at a level to tender.

The Deputy Minister responded on the issue of the communities that were to be removed from the forest land. The Ministers of Forestry, Fisheries and the Environment and Public Works and Infrastructure had established a team to resolve the problem.

Regarding international funding, the Department had attended the World Forest Congress in Korea, where it met with the Korea Ministry of Forestry Services. The Department had proposed a collaboration, which was accepted. The Department was asked to identify areas where it needed assistance. Some of the areas were research, development and innovation. It also requested forest financing for small and medium sized enterprises and training in furniture making. As a follow-up, the Department had requested the establishment of a team, facilitated by the SA embassy, which consisted of themselves and the Department of Forestry Services in Korea. The collaboration was going to assist in the implementation of the master plan. The Deputy Minister assured the Committee that more information would be made available.

Mr Bryant emphasised that the Department should send the information it had promised by the end of the week.

The Chairperson concurred that the Committee would expect the information. She asked the Members for their take on plantations and industrial forestry because the problem was not how the Department managed the plantations but where the forestry branch was coming from. Forestry and water affairs had been moved between departments. It was high time to work together to find a lasting solution to the forestry issue during the Committee’s tenure, even if they had to schedule regular meetings.

The meeting was adjourned.

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